Over the weekend we participated in a local comic book convention, and always there is some new gadget even at conventions where people might not think that there is going to be high technology. What made the convention interesting was that there were a number of vendors who were using Square for their credit card payments rather than their banks, or other merchant processing terminals.
First the disclosure – this is a non-compensated endorsement of a product I found extraordinarily capable. I have used this product in the course of my own business, and while I love it – your own personal experience will vary.
I used the square application on an HTC Incredible Android phone, and overall got very positive comments back from customers who were using the product, and other merchants that I talked to who were using the Square product.
While we have a merchant account, that involves a lot of old fashioned technology, and yes I actually saw someone doing paper carbon credit card processing (I simply cannot comment on that one). No one wants to lug around a credit card system when you do not have to, and the cost of power at a convention is usually four to five times what you would pay anywhere else for power if you are lucky. Being able to keep costs down is a major part of retail, and this is why Square worked so well over the weekend.
But the bad news first, the one major downside and that was battery life, with the Square application running, the battery on my phone only lasted about 2 hours, meaning in a booth with no power we were using the laptop to keep the phone charged. It worked, but normally my phone will last about 12 to 14 hours of my normal use, so it was surprising to see that Square really porked out on power, and that is a major downside in the middle of a convention where power is scarce.
Given that, the plus side is that both merchants and customers actually liked the application. We got a lot of questions about how it works from customers, many who thought the application was simply cool. Using the HTC Incredible touch screen customers were able to sign their credit card receipts without a hitch. Other merchants also found the product fairly cool, although most of us had serious issues with the credit card reader not working correctly so many of us simply typed in the credit card numbers.
Only one customer asked us about security of their transaction, and went out to Square to get their questions answered by the web site. The customer then let us process their card after checking out the web site. The even better part is that I don’t have a pile of paper receipts, just an acknowledgement in my e-mail which is easy enough to archive off and call it good.
It is always nice to find something that simply works the way that it is supposed to work, and Square worked flawlessly for many of the merchants at the comic show this weekend. When even comic shop owners can use a product like this, it makes the banks systems that we would have had to rent for a couple hundred dollars for the weekend, power and telco line at the convention so much cheaper. While the rates might be a bit high for credit processing, when you take in the rest of the costs at a convention this simply made sense.
The question is how will the banks do something similar or is Square going to take the entire market niche?
(Cross-posted @ Managing Intellectual Property & IT Security)
It is important to remember that Square is offering 2.75% and 3.5%.
With Square you are not getting an actual merchant account. They are a payment aggregator, much like PayPal. So if a Square customer has over $1000.00 in sales in a week, Square will hold any money over $1000.00 and not deposit it into their customers bank account for 30 days. So someone could have $3000.00 in sales but they won’t be able to get the $2000.00 for 30 days. Since the Square customer does not have an actual merchant account, Square does not have to follow banking rules and can hold money however they wish, usually 30 days, but sometimes longer. We don’t do this we deposit all money from our customers sales within 2 business days. I am offering a discount rate of 1.74% for swiped transactions and 2.29% for key entered transaction. Here is your page: https://merchant-apply.com/cpciphone.
Unfortunately your product points to an Iphone App, and I seriously do not want an Iphone no matter how magical, we made a huge investment in android, for good or bad, that is where I am at. And yes you are correct on the 30 day hold – for those who are interested that points to https://help.squareup.com/customer/portal/articles/11863 there.
As a smaller merchant you kinda have to take what you get, square is right to be careful with transactions and the rest given the dust up from VeriFone yesterday.
I am ok with the hold, keeps things on an even keel.
Did you ever think of a portable power generator. Sears sells them for less than $120.00. Works great with my Nuritt 8000, which is not rented but I paid for and get updates annually. I like advancement but there is always a cheap start up cost then it goes up. I like having my $$$ 2 days after and not have to wait 30 days when I have high sales. So does square make interest on the $$ that they hold back?
Marie, they probably do, but then why do banks put a 7 day hold on funds, why does paypal when you get started put a hold on funds, why do all these things happen? Really they probably do make interest, but far as banks go, at least square is honest about it, I have had no surprises with them, that counts for a lot in my mind.